Anif warned that the arrival of the El Niño phenomenon in the second half of the year could push inflation in Colombia close to 7%. The think tank pointed to pressures on food and energy as main factors.
José Ignacio López, president of Anif, explained that a severe El Niño would generate inflationary pressures on food of up to 50 basis points. He added that energy costs would add another 20 basis points, bringing annual inflation close to 7% by year-end.
The Ministry of Environment and Ideam have warned of a nearly 96% probability of a strong phenomenon toward the end of the year. Historically, similar events such as 2015-2016 raised food inflation to 18.9% and electricity inflation to 13.6%.
Colombia relies on 62% hydraulic generation, so lower reservoir levels would force greater use of thermal plants. Products such as potatoes, plantains, rice, corn, onions and cassava, as well as meat, milk and fish, would face greater price increases.
